Management Accounting And Control Research Articles

Towards an institutional understanding of risk-based management controls: evidence from a developing market

PurposeIn developing countries, how risk management technologies influence management accounting and control (MAC) practices is under-researched. By drawing on insights from institutional studies, this study aims to examine the multiple institutional pressures surrounding an entity and influencing its risk-based management control (RBC) system – that is, how RBC appears in an emerging market attributed to institutional multiplicity.Design/methodology/approachThe authors used qualitative case study research methods to collect empirical evidence from a privately owned Egyptian insurance company.FindingsThe authors observed that in the transformation to risk-based controls, especially in socio-political settings such as Egypt, changes in MAC systems were consistent with the shifts in the institutional context. Along with changes in the institutional environment, the case company sought to configure its MAC system to be more risk-based to achieve its strategic goals effectively and maintain its sustainability.Originality/valueThis research provides a fuller view of risk-based management controls based on the social, professional and political perspectives central to the examined institutional environment. Moreover, unlike early studies that reported resistance to RBC, this case reveals the institutional dynamics contributing to the successful implementation of RBC in an emerging market.

Management accounting and control, supply chain resilience and healthcare performance under disruptive impact

PurposeBuilding supply chain (SC) resilience has become a priority for many organizations, following a global increase in disruptive events. While management accounting and control (MAC) systems play a supportive role in supply chain management (SCM) decisions, little is known about the contributions offered to resilience decisions in service organizations. The purpose of this study is to examine the performance implications of MCS's impact on proactive and reactive resilience of healthcare supply chains.Design/methodology/approachThis study conducted a survey of 127 public health managers via structural equation modeling. The partial least squares version 3.3.3 was used.FindingsThe results show a statistically positive impact of MAC dimensions on proactive and reactive resilience, which in turn impacts the quality, delivery speed and cost effectiveness of the health SC. However, the integration dimension had an insignificant effect on reactive resilience but a positive effect on proactive resilience.Research limitations/implicationsThis study examined the performance implications of MAC system dimensions and proactive and reactive resilience on operational performance in health SCs, using empirical data from only one country. Thus, generalizing the findings to include other jurisdictions may be impossible.Practical implicationsHealthcare managers in public health facilities should embrace the four MAC dimensions (except the integrated dimension in reactive resilience) to support information generation in SC resilience decisions.Originality/valuePerhaps, the first to provide preliminary empirical evidence on the interactive effect of proactive and reactive resilience and MAC dimensions in terms of broad scope, timeliness, integration and aggregation on health SC operational performance under disruption, in the context of an emerging economy.

Management Accounting and Control in Higher Education Institutions: A Systematic Literature Review

The new public management reforms have led to significant changes in higher education institutions (HEIs) regarding the management accounting and control (MAC) of these organizations. Therefore, this paper provides an overview of the main studies on MAC in these types of organizations through a systematic literature review (SLR). The PRISMA guidelines were followed, and data were collected from the Web of Science and Scopus databases. The final sample encompassed 50 articles, published between 1981 and 2020. The results show that MAC research tends to focus on management control systems and performance evaluation systems. They also suggest that, although the development and implementation of various MAC tools are crucial for HEIs, such implementation often is partial. This is due to the stakeholders’ perceptions/attitudes regarding the importance of such tools. The results also indicate that institutional theory is the most addressed one. Most of the time, HEIs implement MAC tools due to external pressures. By synthesizing the main trends in MAC, this SLR intends to provide a theoretical contribution to the literature in this research field. Several themes for further research are suggested, such as assessing the relationship between MAC and the management of “knowledge” and intellectual capital in these institutions, and addressing sustainability issues. From a practical viewpoint, HEI managers can obtain important insights to apply the most appropriate tools to their institutions.

Interplay between labour dynamics, accounting and accountability practices during the rise of a political logic: an Egyptian case study

PurposeThe purpose of this study is to provide a political explanation of management, accounting and control (MAC) practices in a traditional and unstable African setting. This was done by exploring the influence of latest revolutionary politics in Egypt along with labour dynamics in the context.Design/methodology/approachTheoretically, the study uses the institutional logics perspective to understand the effects of higher order institutions on corporate management and workers at the micro level. Methodologically, the study adopts an interpretative case study approach. Data were collected using a triangulation of interviews, documents and observations.FindingsThe study finds that volatile political settings can have different contradictory implications for MAC practices. It also concludes that revolutionary events play a central role not only in the configuration of MAC practices but also in the mobilisation of labour resistance to these practices.Originality/valueThe study contributes to the literature by investigating the different appearances of MAC practices in a volatile, political or revolutionary context, in contrast to highly investigated stabilised Western contexts. This broadens the definition of the social in the area of accounting and control.

Psychology in management accounting and control research: an overview of the recent literature

For decades, management accounting and control (MAC) researchers have employed a diverse set of source disciplines to predict and examine behavior, and psychology is among the most frequently drawn upon. Although the literature confirms that psychological theories are highly relevant to MAC research, the existing knowledge on this field remains fragmented. Given this background, we examine recent MAC research through a systematic review of the different subfields of psychology to investigate the development of this stream of research. To do so, we collect 125 relevant articles from nine leading accounting journals between 2000 and 2019 and analyze their contents. On this basis, we provide a detailed overview of the use of psychological theories in recent literature and identify links between specific theories and MAC topics. We find that the quantity and proportion of psychology-based MAC research and the diversity of psychology subfields all increase during our investigation period, especially between 2015 and the first half of 2019. Overall, most studies address performance measurement and evaluation topics, and social psychology concepts are the most frequently applied. However, we find considerable differences in the application of psychological theories across different MAC topics. Our review provides insights into the content of this research stream and, thus, serves as a valuable source for researchers seeking an overview of previous investigations drawing on different subfields of psychology.

The construction of environmental performance in ISO 14001-certified SMEs

This paper explores the relationship between the implementation of an environmental management system (EMS) and environmental performance (EP) from a management accounting and control (MAC) stance. Particularly, it asks: How is environmental performance constructed in firms using ISO 14001? And, b), what is the relationship between ISO 14001 and environmental performance? Grounded in the relative novelty of a qualitative cross-case approach to construct EP from the perspectives of small to medium sized enterprises (SMEs) as an understudied empirical context in MAC research, it finds that EP is a fluid, multidimensional concept that embraces not only environmental, but also social, operational and financial dimensions. It also regards the interrelation of processes and outcomes, as well as field and firm, with temporal and spatial horizons. The findings of this research contribute to the MAC literature by proposing that ISO 14001 results in the formalisation of performance measures and outcomes in SMEs. Moreover, the study presents EP as a multidimensional construct and suggests that there are research limitations in trying to capture it solely as an output at the intra-organisational level through quantitative items. Consequently, future theorisations of environmental management control systems require a recognition of the intra-organisational and extra-organisational dimensions that contribute to the construction of EP. For SMEs, this study highlights the value of EMS in improving both substantive and symbolic performance.

A systematic analysis of environmental management systems in SMEs: Possible research directions from a management accounting and control stance

Abstract This paper systematically reviews the drivers, implementation processes and performance outcomes of environmental management systems (EMS) in small to medium-sized enterprises (SMEs) from a management accounting and control (MAC) stance. It finds that there are various contextual, control and performance themes which require research attention. Regarding context, there is the need to: a) explore the relationship between firm size and the development of sustainability tools; b) assess the impact of context for better environmental performance and c) on adoption motivations; and d) explore how EMS affect corporate and individual accountability. Regarding control, there is the need to: a) theoretically explore the control typologies for SMEs; b) better understand the type (i.e. formal or informal) and nature (i.e. tight or flexible) of this control; and c) develop understandings of socio-ideological controls for improved sustainability. Finally, regarding performance, there is the need to: a) understand how environmental performance is defined and the interaction between its dimensions; and b) explore the relationship between EMS and environmental performance in SMEs. The paper serves as a first step to understanding MAC in SMEs, highlighting contemporary issues that are relevant for academic and professional sustainability practice.

Models for: The Relational Constructivist Approach to Management Accounting and Control (MAC) Research

Models for: The Relational Constructivist Approach to Management Accounting and Control (MAC) Research

The hype of risk-based management control: A phronetic approach

This paper provides a phronetic review of Risk Management (RM), and its relationship to Management Accounting and Control (MAC). Building on Flyvbjerg’s (2012) phronetic approach, we study Risk-Based Management Control (RBMC) to answer the phronetic four main questions: (1) Where are we going? (2) Who gains and who loses? (3) Is this desirable? (4) What should we do? This review starts its lines of enquiry from the growing fears in the late modernity and risk society (Beck, 1992; Giddens, 1990), that led to heterogenic reactions and unintended consequences which need exploring and revealing. Hence, we will explore whether this is a right reaction or whether it would give rise to an “illusion of control” fortified with some unintended consequences. The paper concludes that the emergency of RBMC led to heterogenic practices and various unintended consequences. These unintended consequences need further research to unpack innovative solutions that can create real effective RBMC. Moreover, the RBMC best practices are still blurred and undefined, this plea for, more case studies to unpack the actual practices and its problems. The novelty of this research is deploying the phronetic approach to understand and criticise RBMC current studies by explaining the reasons and directions for future research. This work would also be of interest to practitioners interested in risk conception, risk management, and management control.

Organisational culture's impact on management accounting and control practices in the United Arab Emirates

This paper investigates the impact of organisational culture on management accounting and control (MAC) practices in the United Arab Emirates (UAE). Data were collected using a self-administered survey of companies and multiple regression analysis (ordinary least squares) was employed to test the study's hypotheses. Empirical results show internal organisational cultures characterised by high levels of adhocracy (adaptability) or low levels of hierarchy appear to be more conducive to the adoption of MAC practices. On the other hand, organisations with a more market-oriented culture seem to be less reliant on budgeting as a means for exerting management control. In addition, the service industry displays significant differences in its MAC practices relative to other sectors' behaviour. This investigation thus yields new insights into the influences affecting implementation of MAC practices, which is useful for researchers, corporate managers, and other stakeholders.

Constructs in Survey-Based Management Accounting and Control Research: An Inventory from 1996 to 2015

ABSTRACTThis article presents an inventory of constructs measured in survey-based management accounting and control (MAC) research from 1996 to 2015. The inventory is intended to serve as a reference source for researchers to identify prior operationalizations of constructs of interest.

Construct Validity in Survey-Based Management Accounting and Control Research

ABSTRACTThe capacity for survey-based research to advance theoretical knowledge is heavily dependent on the degree to which the measures used capture the constructs that they are intended to represent. Despite the importance of construct validity, the management accounting and control (MAC) literature tends to devote less attention to construct validity than other areas of organizational research. In this article, we discuss contemporary thinking about construct validity and examine how this compares to established practice in MAC research through a systematic review of survey studies from 1996 to 2015. Based on this review, we identify four areas where greater attention is warranted: specifying construct dimensionality, justifying the choice of the measurement model, distinguishing between causal indicators and composite indicators in formative measurement models, and being judicious in the use of single item measures. We discuss the implications of each issue and provide suggestions on how they can be addressed.

Organisational culture's impact on management accounting and control practices in the United Arab Emirates

This paper investigates the impact of organisational culture on management accounting and control (MAC) practices in the United Arab Emirates (UAE). Data were collected using a self-administered survey of companies and multiple regression analysis (ordinary least squares) was employed to test the study's hypotheses. Empirical results show internal organisational cultures characterised by high levels of adhocracy (adaptability) or low levels of hierarchy appear to be more conducive to the adoption of MAC practices. On the other hand, organisations with a more market-oriented culture seem to be less reliant on budgeting as a means for exerting management control. In addition, the service industry displays significant differences in its MAC practices relative to other sectors' behaviour. This investigation thus yields new insights into the influences affecting implementation of MAC practices, which is useful for researchers, corporate managers, and other stakeholders.

Construct Validity in SurveyyBased Management Accounting and Control Research

The capacity for survey-based research to advance theoretical knowledge is heavily dependent on the degree to which the measures used capture the constructs that they are intended to represent. Despite the importance of construct validity, management accounting and control (MAC) literature tends to devote less attention to construct validity than other areas of organizational research. In this paper, we discuss contemporary thinking about construct validity and examine how this compares to established practice in MAC research through a systematic review of survey studies from 1996 to 2015. Based on this review, we identify four areas where greater attention is warranted: specifying construct dimensionality, justifying the choice of the measurement model, distinguishing between causal indicators and composite indicators in formative measurement models, and being judicious in the use of single item measures. We discuss the implications of each issue and provide suggestions on how they can be addressed.

The role of management accounting and control in making professional organizations horizontal

Purpose– In the last decade, greater attention has been paid to the role of management accounting and control (MAC) in making professional organizations more horizontal. The authors argue that earlier research has not shown how the interrelatedness between professional identities and MAC influences attempts to make organizations more horizontal. In this paper the authors respond to the call for more research on the relationship between horizontalization and accounting and control. The purpose of this paper is to contribute to the emerging literature on the relationship between accountability arrangements and professional identities.Design/methodology/approach– Theoretically the authors have an actor-network theory (ANT) approach. Empirically, the authors followed two episodes where actors at top management levels in two Swedish health care organizations introduced horizontalization.Findings– The two episodes support the view that the role of MAC when making professional organizations more horizontal is limited. Professionals dominate what happens at the operational level and they do not act on MAC rules and performance targets in opposition of their professional identity. However, in alliance with other interessement devices MAC may have a role in creating overflows, that is, pointing out imperfections in the existing frame. The authors noticed no signs that professionals developed hybrid identities as in previous research.Originality/value– The authors apply ANT to move beyond the commonly used contingency and new institutional sociology perspectives.

Simulation-based research in management accounting and control: an illustrative overview

In this article, we provide an overview of applications of simulation as a research method in the domain of management accounting and control (MAC). According to different perspectives on management control systems, we report on simulation-based research efforts related to (1) management accounting systems, (2) organizational control mechanisms for managerial decision-making, and (3) strategy development and implementation. We find that—though not always labeled as “MAC”—simulation-based research provides valuable findings for the domain of MAC, and allows for shedding new light on conventional wisdom. For example, simulation-based research suggests that when evaluating the (in-)accuracy of management accounting systems, the mechanisms incorporated in management control systems, as well as the broader organizational context, like the organizational structure, has to be considered. We come to the conclusion that simulation-based research within the domain of MAC could, for example, contribute (i) to a deeper understanding of the interactions between the micro- and the macro-layer of organizations as well as (ii) to the emergent properties of management control systems.

Carbon Accounting: Challenges for Research in Management Control and Performance Measurement

Carbon reduction programs and corporate emissions reporting have expanded rapidly across firms in response to climate change and global warming. This development is partly driven by institutional demands and partly by value creation considerations. The consequences of these developments for management accounting and control (MAC) are not clear, despite anecdotal evidence that suggests an increasing effort to incorporate carbon accounting into traditional decision and reporting processes. The reasons for this lack of clarity are the disproportionate focus in practice on carbon disclosure, compared to a small number of empirical studies, and the absence of an academic debate in this novel area from a MAC perspective. This paper seeks to stimulate such an academic debate by reviewing the extant literature, identifying key theoretical and empirical shortcomings of extant academic research, and outlining some directions for future studies on carbon accounting. These directions are inspired by more established MAC research that may help to guide and organize MAC research in the emerging and exciting field of carbon accounting.

Carbon Accounting: Challenges for Research in Management Control and Performance Measurement

Carbon reduction programs and corporate emissions reporting have expanded rapidly across firms in response to climate change and global warming. This development is partly driven by institutional demands and partly by value creation considerations. The consequences of these developments for management accounting and control (MAC) are not clear, despite anecdotal evidence that suggests an increasing effort to incorporate carbon accounting into traditional decision and reporting processes. The reasons for this lack of clarity are the disproportionate focus in practice on carbon disclosure, compared to a small number of empirical studies and the absence of an academic debate in this novel area from a MAC perspective. This paper seeks to stimulate such an academic debate by reviewing the extant literature, identifying key theoretical and empirical shortcomings of extant academic research, and outlining some directions for future studies on carbon accounting. These directions are inspired by more established MAC research that may help to guide and organize MAC research in the emerging and exciting field of carbon accounting.

Multiple Criteria Decision-Making in Management Accounting and Control-State of the Art and Research Perspectives Based on a Bibliometric Study

As an academic discipline as well as in practice, decision support is one of the most important functions of management accounting and control (MAC). Owing to decision settings' increasing complexity, suitable multiple criteria methods are becoming increasingly important for MAC. We, therefore, examine the extent to which certain multiple criteria decision-making (MCDM) methods are used in the MAC context. In order to do so, we undertook an extensive bibliometric analysis of the management accounting field during the last three decades. The results indicate an increase in the importance of MCDM. Furthermore, recent research activities were classified into different areas of decision-making within MAC since the majority of publications deal with the areas of strategic management, budgeting and performance management. More specifically, strategy and performance evaluation, strategic planning and the selection of alternatives are the most prominent MCDM applications. Our analysis reveals that the analytic hierarchy process (AHP) is the most popular analytical tool with which to support management in complex decision-making situations. The results of the study prove that technical MAC literature does not cover a desirable range of MCDM applications and that the AHP, as well as the analytic network process (ANP) are of increasing importance in respect of the international scope of MAC. Therefore, the area of MCDM continues to be an active part of management science research and application, specifically of MAC.

Field Research in Management Accounting and Control: A Review and Evaluation

Surveys the field research literature in management accounting and control (MAC) published in the period 1984‐1992. Proposes a definition of field research and compares the 82 published works that meet this definition with respect to their motivations, research designs and presentation formats. The comparison reveals the tremendous diversity among the field research publications. Evaluates the methods and contributions of this research ‐ field researchers usually choose interesting, relevant topics but many of the works have weaknesses in research design, data presentation and interpretation of findings. Concludes with some observations on the costs, risks, and potential payoffs of field research.